This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up to the minute market analysis see our live trading room.
INDICES
AUSTRALASIA
ASX – 7000 (-8 or -0.11%)
A quiet week for the ASX and our levels remain unchanged.
VOLATILITY ALERTS:
Tues 11:30 – NAB Business Confidence
For a move higher we would like to see the ASX hold above 6980. Should this occur, a move into 7030 could be expected; and if momentum is strong we cannot rule out moves to 7135 and 7195
Failure to hold above 6980 means a potential move into 6875. 6745 is the next support level down if 6875 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6650.
EUROPE
DAX – 13609 (+74 or +0.55%)
The DAX continues its upside momentum with a third straight weekly gain.
For the DAX to move higher we would like to see it hold above 13600. Should this occur then 13890 is the next level ahead. If upside momentum is strong then 14140 and 14330 cannot be ruled out.
To the downside, should we not see it hold above 13600, we will look for a move into support at 13250. A strong break and close below this handle and 12965 is the next level down. If downside pressure mounts then 12635 cannot be ruled out.
US
S&P 500 – 4140(+11 or +0.27%)
A hot NFP report left markets a bit on the edge again as traders consider whether the Fed may lean more hawkish.
VOLATILITY ALERTS:
Weds 22:30 – US CPI
Thurs 22:30 – US PPI
Sat 00:00 – Prelim UoM Consumer Sentiment
For a move higher we would like to see the S&P hold above 4085. Should this occur, we will look for a move to 4160; and if momentum is strong we cannot rule out moves to 4210 and 4300.
If we cannot hold above 4085, we could see this market move down into 4035. A break of this level however may result in a quick move down to 3965, and if momentum to the downside remains strong we may see a fast move back down to 3870.
FOREX
AUD/USD – 0.6910(-78 or -1.12%)
The Aussie Dollar edged lower as recent upside momentum grinds to a halt…
VOLATILITY ALERTS:
Tues 11:30 – NAB Business Confidence
For a move higher this week, we would like to see it close above 0.6945. We will then be targeting a move through 0.6995. If we see a strong break and close above this level then we can’t rule out a move to 0.7060. Should momentum to the upside be really strong then 0.7100 could be targeted.
If this market cannot close above 0.6945, we could see a move down into 0.6900. A strong break of this level may result in a move into 0.6830, however, any weakness below this level could see a sharp drop into 0.6755.
EUR/USD – 1.0178 (-48 or -0.47%)
The Euro continues to trade within a range and our levels remain the same.
VOLATILITY ALERTS:
Weds 22:30 – US CPI
For a move higher we would like to see the Euro hold above 1.0215. Should this occur we could see a move into 1.0355. A break of this level could see this market rally further to 1.0445 and 1.05.
If the EURO cannot hold above 1.0215, we will see a move into 1.0075. A strong break of this level may result in a move into 1.0000, however, any weakness below this level could see a sharp drop into parity at 0.9875.
GBP/USD – 1.2070 (-110 or -0.9%)
The largest rate hike in 27 years in the UK did little to help the Pound as the Cable dropped lower.
VOLATILITY ALERTS:
Thurs 21:00 – BoE interest rate decision
For a move to the upside, we would like to see Cable close above 1.2075 before a break higher into 1.2160. If this market can see a strong close above this level we may then see a strong push back into 1.2245. If upside momentum is really strong then a move back into 1.2330 can’t be ruled out.
Should we fail to close above 1.2075, we will look for a move down to 1.1955. A break below this level however could see Cable further depreciate to 1.1825 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1760.
USD/JPY – 134.95 (+174 or +1.31%)
The Dollar bounced back! Rising yields again supported the USD as it reversed the previous weekly declines.
VOLATILITY ALERTS:
Weds 22:30 – US CPI
Thurs 22:30 – US PPI
For a move to the upside, we must now see this market hold above 134.58. Should this occur we will look for a move into 135.3, and if upside momentum is strong we could see a move higher into 137.2 and potentially 139.3.
If we cannot close above 134.58, we could see a move back to test 133.72 before a pause to the downside. A break below this level may result in a sharp move lower into 131.32, and any further breaks to the downside may see a bigger move into 130.25.
COMMODITIES
GOLD – 1775 (+9 or +0.51%)
A volatile week for GOLD but it continues to grind higher.
VOLATILITY ALERTS:
Weds 22:30 – US CPI
Sat 00:00 – Prelim UoM Consumer Sentiment
For a move higher we need to see this market hold above 1765. Should this occur we could see a move into 1785; and any break of this level could see a stronger move into 1800. If momentum is strong then 1815 cannot be ruled out.
If Gold cannot hold above 1765, we will look for a move down to 1750. A break below this level could see a move lower into 1720; and if momentum is very strong to the downside we could see a move to 1700.
CRYPTOS
BITCOIN – 22962 (-983 or -4.11%)
BTC sellers wrestled back some control and now buyers will look to hold the up channel structure.
For a move higher we must now see this market close above 23675. Should this occur we could see a move into 25875 before retesting 28530. If upside momentum is really strong then we can’t rule out 30985.
Failure to close above 23675 could see a move into 21715. If selling pressure takes control then we could see a move down to 20000. A close below this level and 17560 can’t be ruled out, maybe even a 14000 print.
